Best of the Hotline: Reply to inspection

A buyer and seller entered into an agreement of sale that was subject to a home inspection contingency. Within the 10-day contingency window, the buyer submitted a corrective proposal (Reply to Inspection Addendum) that sought four repairs. After considering this proposal, the seller informed his agent that he would only make two of the four requested repairs.

In a timely fashion (within five days of the end of the contingency period), the listing agent informed the buyer agent, via email, of the seller’s willingness to make but two of the repairs. This email merely consisted of a sentence or two and did not include an amended copy of buyer’s Reply to Inspection Addendum.

The buyer agent, consistent with her experience, anticipated that the seller’s response to the corrective proposal would come in the form of a marked-up amended Reply to Inspection Addendum. Two of the requested four repairs would be crossed off; the seller would have initialed and dated the changes, signed the form and return it for the buyer’s approval, rejection or counter. But no such form was forthcoming.

After a few days, the buyer agent called the listing agent to ask when she could expect to receive the seller’s counterproposal to the buyer’s Reply to Inspection Addendum. The listing agent, sounding somewhat shocked, replied that she had already communicated the seller’s rejection to the corrective proposal in the email which offered to do only half of that which the buyer sought.

In the heated discussion that followed, the listing agent remained steadfast that the seller had timely responded to the buyer’s corrective proposal in writing. And, since the buyer did not terminate the transaction within two days of the listing agent’s email notification, the buyer was stuck and had to proceed with the purchase without the benefit of any repair.

Q: Did the listing agent’s email advising the buyer agent that the seller would perform but two of the four requested repairs constitute a written rejection of buyer’s corrective proposal thereby giving the buyer but two days to either accept the property or terminate the purchase agreement?

A:  We are of the opinion that the email communication satisfied the seller’s obligation under the agreement of sale to inform the buyer in writing that the seller will agree to the corrective proposal or not so agree. Let us break this down: was there a writing? Yes, an email constitutes a writing. Was this writing from the seller? For all practical purposes, yes.

The agreement of sale at paragraph 27 provides that communications to and from buyers and sellers are satisfied by the communications of their agents. Did this writing sufficiently notify the buyer that the seller would “not satisfy all terms of buyer’s proposal?” This perhaps the toughest of the questions to answer though we believe, yes, telling the buyer that he would repair two of the four requested items sufficiently advised the buyer that the seller “would not satisfy all terms.”

This buyer agent should have considered that the email from the listing agent stating that the seller would not do all requested of him was the written response she was waiting for. Do not assume that the written response will always be a counterproposal in the form of a marked-up Reply to Inspection Addendum. Buyer agents, play it safe and consider that the two-day buyer response time has begun.

Mr. Marsico and Mr. Goldsmith are  attorneys with Caldwell & Kearns which serves as general counsel to PAR. A portion of their practice is dedicated to providing advice and counsel to real estate licensees and representing and defending real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. They routinely counsels employers on employee relations issues as one of the voices of the PAR Legal HotLine.  He may be reached at realcompliance.com.